AMR Corp , the bankrupt parent of American Airlines, is racing to renegotiate aircraft leases and bag what experts believe could be hundreds of millions of dollars in savings.

The airline effectively has until January 27 to inform a court about its lease plans, thanks to a bankruptcy statute giving a company 60 days to make decisions on such deals. American, which declined to comment about its lease plans, will need to have a working plan for which leases it wants to keep, alter or reject.

The process is fraught with questions about AMR's future fleet needs. And lease holders, eager to preserve contracts signed in better days, are sure to balk when faced with the prospects of accepting lower lease rates or AMR's rejection of outdated and unwanted airplanes.

There's a lot of negotiation, and some of it is playing chicken, said Adam Pilarski, senior vice president at AVITAS, an airline consulting company that also works with aircraft lessors and lenders.

Aircraft leases are likely to be the biggest trimmable cost after labor for AMR, which filed for Chapter 11 on November 29 in New York, citing uncompetitive labor costs as a key disadvantage in an industry that wrestles with overcapacity and high fuel costs. American is the third largest U.S. carrier.

Aircraft and equipment leases amount to around a third of AMR's roughly $30 billion in liabilities.

Airlines often order aircraft from a manufacturer but lease the planes from a third party as a way to spread the risk of owning costly aircraft.

Bankrupt companies can reject leases on aircraft and engines or renegotiate leases with lower rates. AMR stands to save hundreds of millions of dollars by renegotiating leases, several experts said, citing comparisons with what other airlines did with leases in Chapter 11.

The company must renegotiate with lease holders while keeping enough planes -- and the right models -- in the air. AMR will need to consider factors ranging from the age of its jets to long-term plans for its fleet. That means lease holders with more fuel-efficient planes may hold more leverage.

You look at age of aircraft, fuel consumption costs, how many miles are on each aircraft, and what your plans are for upgrading your fleet, said bankruptcy attorney Kris Hansen, who is not involved in the case but worked on Delta Air Lines Inc's bankruptcy.

Each airline has a full team who does a thorough profitability analysis, Hansen said.

INEFFICIENT FLEET

AMR has about 900 planes: roughly 600 at American, and 300 at its Eagle unit, bankruptcy court filings show. Of those, 219 airplanes are leased by 22 third parties, according to Ascend Worldwide, which provides data on aerospace businesses.

GE Capital Aviation Services has the largest number of AMR airplanes with at least 60. Boeing Capital manages contracts on 38, Ascend Worldwide said.

GECAS said it does not expect to be hurt by lease renegotiations with AMR.

The aircraft are largely B737-800s that are core to AMR's fleet and thus unlikely to be impacted by any potential capacity cuts, said spokesman Daniel Whitney. He said GECAS has done business with AMR for more than 20 years.

About half of AMR's overall leased aircraft are older MD-80 planes, according to Ascend Worldwide. MD-80s have not been manufactured in more than a decade, and are known to be gas guzzlers compared with modern jets.

AMR's lead bankruptcy attorney, Harvey Miller, told Reuters in November that many of the MD-80 leases, as well as some 757 model leases, will be shed. He declined further comment when contacted more recently.

The fate of AMR's leases also hinges on its route network.

The carrier focuses its network on cities that are top business travel destinations. The trend among major U.S. airlines in recent years has been to slash and closely manage the number of seats for sale. AMR is no exception. The strategy enables carriers to more easily weed out unprofitable routes, fly fuller planes and charge more for tickets.

AMR has not said what specific changes it will make to its routes. Some experts expect the network to shrink modestly, providing more incentive for AMR to reject aircraft leases.

AMR already has rejected leases for 24 planes, mainly MD-80s, and their equipment. It also has so far elected to keep more than 20 plane leases, agreeing to pay more than $10 million to bring its lease payments current. In addition to rejecting leases, AMR can sell or abandon aircraft it owns.

The company announced late on Monday that it plans to hire SkyWorks Capital, an aviation-industry restructuring adviser, to help make decisions on how to manage its bankruptcy case, including what to do with plane leases.

Meanwhile, the company has ordered 460 new narrowbody planes set to arrive from Boeing Co and Airbus between 2013 and 2022.

The new arrivals will eventually refresh its fleet, making it the youngest and most fuel-efficient in the industry. Those orders give AMR an opportunity for growth over the next few years, allowing it to be more liberal now in shedding outdated aircraft.

BIG SAVINGS ON THE LINE

Other airlines have used Chapter 11 to reinvent their aircraft cost structures.

Delta, which later bought Northwest Airlines, saved close to $1 billion a year after it sold or rejected leases on about 140 aircraft before emerging from bankruptcy in 2007.

United Airlines parent UAL Corp , which later bought Continental Airlines, sold or rejected leases on more than 100 planes, saving about $850 million a year between 2003 and 2008.

While bankruptcies can drag on for years, courts want quick decisions on leases. The 60-day deadline is crucial for aircraft owners who need to know if they can expect payments or if they should look for other operators for their planes.

While AMR faces a January 27 court date to disclose lease decisions, it may not provide a final road map by then. A bankrupt company can extend the 60-day deadline for leases it is hoping to renegotiate.

(Reporting by Nick Brown in New York and Kyle Peterson in Chicago; Editing by Tim Dobbyn)